5 Life Periods and how to keep your health up and health insurance down

No matter your age, you can help keep your body healthy and your money out of the health care system by eating right, exercising and avoiding habits that contribute to chronic illness. Having the appropriate insurance may also help your bottom line more than you think. Follow this guide to see if you have what you need at various stages in life.

20s

Younger people tend to have fewer medical issues, but that doesn’t mean you should ditch health insurance altogether. To save money while making sure you’re covered, consider a qualified high-deductible plan. Also known as a catastrophic health plan, this type of insurance typically covers costs for serious illness or unexpected accidents. But you’re responsible for minor or routine expenses. You’ll pay a lower monthly premium and a higher deductible than with a traditional plan.

“It also comes with a powerful triple tax benefit: Not only are contributions tax-deductible, but earnings and qualified withdrawals are tax-free, too,” says J.J. Montanaro, a certified financial planner at USAA.

Here’s another option: If you’re an unmarried dependent who doesn’t have access to employer-sponsored health care, you can stay on your parents’ health plan until you turn 26.

Consider broadening your coverage. You may want to supplement your regular health insurance with accident insurance. It can help cover emergency treatment and related expenses, such as transportation and lodging, if you or covered family members are injured.

While a health plan may cover much of your treatment costs, a critical illness plan typically pays a lump-sum benefit if you’re diagnosed with a significant illness or suffer a heart attack or stroke. It may provide extra money for things like child care and housecleaning while you’re on the mend. “The benefits provided by accident and critical illness insurance help take away the financial stress so you can focus on recovering,” says Greg Galdau, USAA assistant vice president of health solutions.

Health insurance can pay some of your medical bills, but what about the income you could lose if you become seriously sick or are injured and can’t work? That’s what disability insurance is for. Your employer may provide some coverage, but it usually isn’t portable, so consider a personal policy you can take with you if you quit or lose your job.

Consider a flexible spending account. Your employer may offer one of these tax-advantaged plans that let you use pretax dollars to pay for medical expenses and dependent care, too.

40s

While it’s smart to begin saving for retirement in your 20s, most people start to focus a little more on the specifics once their 40s roll around. “As you start crunching the numbers more seriously, be sure to factor health care costs into your assumptions about your spending needs in retirement,” Galdau says. Out-of-pocket expenses for a 65-year-old couple could suck hundreds of thousands of dollars from a retirement nest egg, according to the Employee Benefit Research Institute.

Start learning about long-term care insurance. If you equate long-term care insurance with nursing home coverage, think again. While it can cover those costs, it generally does something even more appealing – help give you the resources you need to stay in your home.

50s

Stop putting off long-term care insurance. Long-term care expenses can pose a real threat to your retirement savings and lifestyle. This insurance can be flexible in its design – you can typically vary the features of the policy to stay within a budget while still reducing risk to your assets.

If you’ve become a caregiver for a parent or other family member, tap into information resources such as care.com or those provided by the National Alliance for Caregiving to make your role as easy as possible.

60s

Don’t go without. If you retire early and lack employer-provided health insurance, don’t be tempted to cut costs and skip insurance until you’re eligible for Medicare at 65. Consider buying an individual policy to bridge the gap, if you have no other option. To avoid making important decisions under pressure, learn about your Medicare choices well before you have to make them. – (BPT)